Kid ASA

Investor Presentation • May 15, 2019

Highlights Q1 2019

• Revenues increased by 8.4% compared to Q1 2018
• Gross margin of 60.5% (58.4 %)
• EBITDA excluding IFRS 16 effects of MNOK 15.1 (MNOK 9.9), representing an EBITDA margin of 5.1% (3.6 %)
• One store opening, seven refurbishments, one store relocation and two store closures
• NIBD/EBITDA (excluding IFRS 16 effects) of 1.1 (1.7)

Revenues and market share

• Like-for-like growth of 5.1% (3.3 %) including online sales
• Online sales growth of 22.6% (54.1 %)
• Kid outperformed the home textile market for the twelve months ending 31.12.2018. Home textile market (1.0%) performed below broader retail benchmark (1.1%) for the same period.

Revenues as of April

Revenues are up 10.2% YTD compared to 2018

• Due to the revenue effect following the timing of Easter, Kid ASA has decided to announce the revenues per April 2019 in the Q1 report
• Same number of shopping days per April 2019 as for the same period in 2018
• Total revenue growth was 10.2% YTD (6.6 %)
• Like-for-like growth was 6.2% YTD (1.7 %)
• Online sales growth was 27.1% YTD (66.6 %)
• We remain optimistic about the execution of our growth initiatives and the sales development in the second quarter

Operational focus in Q1

Operational focus:

• Solid execution of campaigns and a commercial product assortment
• Improved inventory allocation to stores increased the availability of seasonal products
• Successful seasonal assortment and strong development in new categories driving significant growth
• Funkle launched as a brand for our new decorative lighting concept
• Store refurbishment program advancing at high speed in order to support growth for the remainder of the year

Gross margin

Gross margin increase of 2.1 pp in Q1

• Gross margin was 60.5% for the quarter, up of 2.1 pp from Q1 2018
• Gross margin improvement driven by lower degree of rebates and favourable USD hedge
• Impact from favourable USD hedge is decreasing

Gross margins in 2018 and 2019

EBITDA

EBITDA margin excl. IFRS 16 effects of 5.1% (2.9%) in Q1

• Employee benefits-related expenses increased by 10.2% in Q1 2019
  • 3.1 pp due to net new stores
  • 3.0 pp due to aggressive store refurbishment program and general salary inflation at store level
  • 0.6 pp increase due to increased provision for store, HQ and management bonus
  • 3.5 pp due to increased staffing on marketing and category development in addition to general salary inflation at the HQ
• Other OPEX increased by 9.2% in Q1 2019
  • 3.1 pp related to retail space rental costs for net new stores
  • 2.2 pp related to other store and HQ rental costs driven by inflation and relocation of stores
  • -0.6 pp related to decrease in marketing expenses
  • 4.5 pp related to other OPEX
• OPEX to sales ratio, excl. IFRS 16 effects, in Q1 of 55.5% (54.8%)

EBITDA 2018 and 2019

7 Kid ASA Q1 2019

Income statement

Net profit margin of -0.2% (- 0.6 %) in Q1

• Depreciation increased due to last year's CAPEX levels
• Corporate tax rate of 22% in 2019 (23% in 2018)
• Adjusted* EPS of NOK -0.01. EPS excl. IFRS 16 increased to NOK 0.05 (NOK -0.04) in Q1 2019, and increased to NOK 3.82 (NOK 3.15) for the last twelve months

Income statement

Amounts in MNOK	Q1 2019 IFRS 16	IFRS 16 effects	Q1 2019 adjusted	Q1 2018 IAS 17
Revenue	298,0		298,0	274,9
COGS	-117,7		-117,7	-114,3
Gross profit	180,3		180,3	160,6
Gross margin (%)	60,5 %		60,5 %	58,4 %
Other operating income	0,0		0,0	0,0
OPEX	-128,3	-37,0	-165,2	-150,6
EBITDA	52,0	- 37,0	15,1	9,9
EBITDA margin (%)	17,5 %		5,1 %	3,6 %
Depreciation and amortisation	-42,7	33,0	-9,7	-9,3
EBIT	9,4	-4,0	5,4	0,7
EBIT margin (%)	3,1 %		1,8 %	0,3 %
Net finance	-10,0	7,1	-2,9	-3,0
Profit before tax	-0,6	3,1	2,5	-2,3
Net profit	-0,5		2,0	-1.8

8 Kid ASA Q1 2019

*Net profit is adjusted in Q4-2018 for a change in deferred tax related to the trademark caused by reduced tax rate from 23% to 22% with effect from 1.1.2019

Cash flow

NIBD/EBITDA excl. IFRS 16 of 1.1 (1.7) per 31.03.2019

• Inventory build-up compared to last year according to plan
• Increased cash spend due to increased tax prepayments and increased investments in stores
• NIBD/EBITDA of 3.7 (based on EBITDA for the last twelve months), incl IFRS 16 effects
• NIBD/EBITDA excl. IFRS 16 of 1.1 compared to 1.5 as of 31.03.2018.

Cash flow

Amounts in MNOK	Q1 2019 IFRS 16	IFRS 16 effects	Q1 2019 adjusted	Q1 2018 IAS 17	FY 2018 IAS 17
Net cash flow from operations	-46,6	37,0	-83,6	-61,9	265,2
Net cash flow from investments	-12,7		-12,7	-5,1	-37,3
Net cash flow from financing	-40,5	37,0	-3,5	-3,4	-115,8
Net change in cash and cash equivalents	-99,8		-99,8	-70,4	112,1
Cash and cash equivalents at the beginning of the period	242,2		242,2	130,1	130,1
Exchange gains / (losses) on cash and cash equivalents	-0,4		-0,4	-2,4	0,0
Cash and cash equivalents at the end of the period	141,9		141,9	57,3	242,2

Working capital

Amounts in MNOK	Q1 2019 IFRS 16	IFRS 16 effects	Q1 2019 adjusted	Q1 2018 IAS 17	FY 2018 IAS 17
Change in inventory	-30,2		-30,2	-4,3	48,8
Change in trade debtors	-0,8		-0,8	0,4	0,5
Change in trade creditors	10,6		10,6	-6,1	-7,5
Change in other provisions*	-40,0		-40,0	-42,7	11,6
Change in working capital	-60,4		-60,4	-52,8	53,5

9 Kid ASA Q1 2019

*Change in other provisions includes other receivables, public duties payable and other shortterm liabilities.

Operational initiatives

Mid-term objectives unchanged

• Well prepared summer assortment and campaigns ready to launch
• New product initiatives in pipeline, as well as, updates on package design
• Finalising 2019 store refurbishments program in Q2
• Strong focus on customer service level and introducing service level KPI

Events after the reporting period

Hemtex Aquistion

• Kid ASA has entered into a binding share purchase agreement with ICA-Gruppen for 100% of the shares in Hemtex AB.
• Kid ASA has secured a debt financing structure with Nordea for the new group
• Hemtex AB operates 141 home textile and interior stores across Sweden, Finland and Estonia. All closing events related to the share purchase agreement have been completed
• More information onhttps://investor.kid.no/

11 Kid ASA Q1 2019

IFRS 16 - effects

Balance Sheet
	31.03.2019	IFRS 16	31.03.2019	31.03.2018
Amounts in MNOK	IFRS 16	Effects	IAS17	IAS17
Assets
Trademark	1 459,6	-	1 459,6	1 459,6
Other intangible assets*	2,7	6,1	8,8	10,3
Total intangible assets	1 462,3	6,1	1 468,4	1 469,9
Right of use asset*	667,2	-667,2	-	-
Fixtures and fittings, tools, office machinery and equipment	95,1	-	95,1	88,1
Total tangible assets	762,3	-667,2	95,1	88,1
Total fixed assets	2 224,6	-667,2	1 563,4	1 558,0
Inventories	283,3	-	283,3	306,3
Trade receivables	3,8	-	3,8	3,1
Other receivables	12,7	10,0	22,7	25,6
Derivatives	1,7	-	1,7	3,2
Totalt receivables	18,1	10,0	28,1	31,9
Cash and bank deposits	141,9	-	141,9	57,3
Total currents assets	443,4	10,0	453,4	395,6
Total assets	2 668,0	-651,2	2 016,8	1 953,6

The accompanying notes are an integral part of the Interim condensed consolidated financial statements

* reclass of intangible asset of MNOK 6.1 to RoU

13 Kid ASA Q1 2019

** reclass of liabilities to financial institutions to lease liabilities

	31.03.2019	IFRS 16	31.03.2019	31.03.2018
Amounts in MNOK	IFRS 16	Effects	IAS17	IAS17
Equity and liabilities
Share capital	48,8	-	48,8	48,8
Share premium	321,0	-	321,0	321,0
Other paid-in-equity	64,6	2,4	67,0	64,6
Total paid-in-equity	434,4	2,4	436,9	434,4
Other equity	650,4	-	650,4	580,6
Total equity	1 084,9	2,4	1 087,3	1 015,0
Deferred tax	319,7	0,7	320,4	333,5
Total provisions	319,7	0,7	320,4	333,5
Lease liabilites	537,3	-537,3	-	4,1
Liabilities to financial institutions**	425,0	2,5	427,5	425,0
Total long-term liabilities	962,3	-534,9	427,5	429,1
Lease liabilites	119,4	-119,4	-	-
Trade payables	48,2	-	48,2	39,0
Tax payable	7,5	-	7,5	20,8
Derivative financial instruments	-	-	-	-
Public duties payable	66,2	-	66,2	61,2
Other short-term liabilities	59,8	-	59,8	55,0
Total short-term liabilities	301,1	-119,4	181,7	176,0
Total liabilities	1 583,2	-653,6	929,6	938,6
Total equity and liabilities	2 668,0	-651,2	2 016,8	1 953,6